an opinion Ninth Circuit Court of Appeals by benbenzhou


									                  FOR PUBLICATION

as individuals and on behalf of all
others similarly situated,
               Plaintiffs-Appellants,        No. 10-55658
                                              D.C. No.
HOMES, a Nevada General                        VAP-OP
Partnership; CTX MORTGAGE

REMEDIOS MARTINEZ, as an                
individual and on behalf of all
others similarly situated,                   No. 10-55660
                 v.                           D.C. No.
D.R. HORTON, INC.; DHI                        VAP-DTB

17932            MAYA v. CENTEX CORPORATION

MCDONALD, as individuals and on
behalf of all others similarly
               Plaintiffs-Appellants,        No. 10-55662
                 v.                           D.C. No.
MDC HOLDINGS, INC., DBA                        VAP-OP
Richmond American; RICHMOND

as individuals and on behalf of all
others similarly situated,
               Plaintiffs-Appellants,        No. 10-55663
                                              D.C. No.
HOMES OF CALIFORNIA, INC.;                    VAP-DTB
                 MAYA v. CENTEX CORPORATION            17933

individuals and on behalf of all
others similarly situated,
               Plaintiffs-Appellants,        No. 10-55664
                 v.                           D.C. No.

MATTHEW NIELSON; NICOLE                 
NIELSON, as individuals and on
behalf of all others similarly
situated,                                    No. 10-55665
                                              D.C. No.
17934            MAYA v. CENTEX CORPORATION

GASPARE C. ONETO; PAUL M.               
BUTLER, as individuals and on
behalf of all others similarly               No. 10-55667
               Plaintiffs-Appellants,         D.C. No.
                 v.                           VAP-DTB
                 MAYA v. CENTEX CORPORATION             17935

JAMES F. DODARO, as an individual        
and on behalf of all others
similarly situated,
Standard Pacific Homes;
CORPORATION; CENTEX HOMES,                    No. 10-55668
                                                D.C. No.
LLP, Erroneously Sued As Center
Homes and Center Homes                       5:09-cv-01666-
Corporation; CTX MORTGAGE                       VAP-OP
COMPANY; DHI MORTGAGE                          OPINION
Erroneously Sued As Universal
Mortgage Company; EAGLE HOME
Erroneously Sued As Eagle Home
Mortgage Inc.,
17936               MAYA v. CENTEX CORPORATION
         Appeal from the United States District Court
             for the Central District of California
         Virginia A. Phillips, District Judge, Presiding

                    Argued and Submitted
            May 9, 2011—San Francisco, California

                     Filed September 21, 2011

     Before: Betty B. Fletcher and Sidney R. Thomas,
 Circuit Judges, and Nancy Gertner, District Court Judge.*

                   Opinion by Judge B. Fletcher

   *The Honorable Nancy Gertner, District Judge for the U.S. District
Court for Massachusetts, Boston, sitting by designation. Judge Gertner
retired from the judiciary on September 1, 2011, but concurred in the opin-
ion prior to her retirement.
                MAYA v. CENTEX CORPORATION            17939

Andrea Bierstein (argued), Mitchell Breit, and Jayne Conroy,
Hanly Conroy Bierstein Sheridan Fisher & Hayes LLP, New
York, New York; Derek Yeats Brandt, Simmons Browder
Gianaris Angelides & Barnerd LLC. East Alton, Illinois; Jae
Kim, Richard Dale McCune, Jr., and David Christopher
Wright, McCune & Wright, LLP, Redlands, California, for
plaintiffs Sylvester Maya, Ofer Masachi, Remedios Martinez,
Edilberto Lumalu, Brian Dietz, Brenda Dietz, Candice
McDonald, Stella Stephens, Timothy Young, Solomon Kel-
ley, James Molina, Matthew Nielson, Nicole Nielson,
Gaspare C. Oneto, Paul M. Nakabayashi, Sandra L. Naka-
bayashi, John Butler, Linda Butler and James Dodaro, on
behalf of themselves and others similarly situated.

Nathaniel Garrett (argued), Darren K. Cottriel, Richard S.
Ruben, and Craig Stewart, Jones Day, Irvine, California, for
defendants Lennar Corporation, Lennar Homes of California,
Inc., and Universal American Mortgage Company.

William P. Donovan, Jr., Anahit Tagvoryan, DLA Piper LLP,
Los Angeles, California, for defendants Center Corporation,
Centex Homes, and CTX Mortgage Company.

Valentine Shade Hoy, Megan A. Mazza, Jeffrey R. Patterson
and Charles L. Pernicka, Allen Matkins Leck Gamble Mallory
& Natsis, LLP, San Diego, California, for defendants D.R.
Horton, Inc. and DHI Mortgage Company GP, Inc.

Jason Charles Gless, Daniel Adlai Berman, and Keith Evan
Smith, Wood Smith, Henning & Berman, Riverside, Califor-
nia, for defendants MDC Holdings, Inc., Richmond American
Homes of California, Inc., and HomeAmerican Mortgage

Lawrence J. Bracken, II, Phillip J. Eskenazi, Kirk Hornbeck,
and Bryan A. Powell, Hunton & Williams, Atlanta, Georgia,
17940              MAYA v. CENTEX CORPORATION
for defendants Beazer Homes USA, Inc., Beazer Homes
Holdings Corporation, and Beazer Mortgage Corporation.

Donald L. Morrow, Paul, Hastings, Janofsky & Walker LLP,
Costa Mesa, California, for defendants Shea Homes, Inc., J.F.
Shea Co, Inc., and Shea Mortgage, Inc.

Nancy Nguyen Sims and Perrie M. Weiner, DLA Piper LLP,
Los Angeles, California, for defendants The Ryland Group,
Inc., Ryland Homes of California, Inc., and Ryland Mortgage

Robert Lennart Green, Stephanie Michelle Lemmon, Kather-
ine Villareal Lizardo, and Brian Plante, Green & Hall, APC,
Santa Ana, California, for defendants Standard Pacific Corp.,
DBA and Standard Pacific Mortgage, Inc.



   This case arises against the backdrop of the national hous-
ing crisis. Nationwide, foreclosures are increasing, construc-
tion and purchase of new homes is decreasing, and home
values are plummeting.1 In some ways, the facts presented
here echo national trends, but we decide a fairly narrow ques-
tion: whether individuals who purchased homes in new devel-
opments have standing to sue the developers for injuries
allegedly caused by the developers’ practice of marketing
neighboring homes to individuals who presented a high risk
of foreclosure and abandonment of their homes, financing
those high-risk buyers, concealing that information, and mis-
representing the character of the neighborhoods. The district
    See generally, Harvard University Joint Center for Housing Studies,
The State of the Nation’s Housing 2011, available at
                   MAYA v. CENTEX CORPORATION                     17941
court held that plaintiffs did not have standing because none
of the alleged injuries amounted to a concrete, non-
conjectural injury-in-fact, and that there was no sufficiently
strong causal connection between any injury and defendants’
conduct. It also denied plaintiffs leave to amend their com-
plaints. We reverse and remand for further proceedings.



   Plaintiffs are individual homeowners who purchased
houses in new developments constructed by one of eight large
national home-builders between 2004 and 2006. Each of them
made a down payment of twenty-percent or more of the
home’s purchase price. Defendants are some of the nation’s
largest housing developers, and include the developers’ parent
companies and subsidiary mortgage companies. Plaintiffs
seek damages, attorneys fees and costs, and the option to
rescind their home purchases due to defendants’ fraud, negli-
gent misrepresentation, breach of implied covenant of good
faith and fair dealing, and violations of California’s Business
and Professional Code (CBPC). They also seek an injunction
prohibiting defendants from continuing to engage in practices
violating the CBPC, or providing mortgage services or financ-
ing to buyers purchasing homes from defendants.

   Plaintiffs claim that defendants represented that they were
building “stable, family neighborhoods occupied by owners of
the homes” According to the plaintiffs, “[i]mplicit in this mar-
keting scheme was that [d]efendants were making a good-
faith effort to sell homes to buyers who they expected could
afford to buy the houses and would be stable neighbors.”
Nevertheless, defendants marketed the houses to “unqualified
buyers who posed an abnormally high risk of foreclosure.”2
     Plaintiffs do not explicitly define what they mean by “unqualified”
buyers, but it appears their definition encompasses those with unverified
income, poor credit history, or inability to make a down payment of less
than 20% of the home’s value.
17942            MAYA v. CENTEX CORPORATION
Similarly, plaintiffs claim that defendants represented that
they “discourage[ ] speculation . . . [and] intended to sell
homes only to people who will occupy them” but sold homes
to investors who had no intent to reside in the homes and were
more likely to walk away from the homes in times of eco-
nomic hardship.

   Plaintiffs claim that these misrepresentations and omissions
were part of a comprehensive scheme to increase defendants’
profits. They allege that defendants financed at least 65% of
the mortgages on homes in their communities. Plaintiffs con-
tend that by marketing homes to high-risk buyers, and by
financing buyers who may not have been able to obtain other
financing, defendants created a “buying frenzy” that artifi-
cially increased demand and home prices. They maintain that
defendants’ marketing and lending practices were material
information “related both to the value of their houses and the
desirability of the properties.” They allege that “[i]f Defen-
dants had made such disclosures, Plaintiffs would not have
purchased the houses from Defendants and/or [sic] would not
have paid an inflated price for the house.”

    Plaintiffs aver that since they purchased their homes, “as
was inevitable, . . . these unqualified and high-foreclosure-risk
buyers began to default on their loans leading to foreclosures
and short sales.” Their neighborhoods have allegedly had “a
number of foreclosures and short sales that have resulted in a
substantial loss of value to the surrounding homes.” They
allege that the loss was “much greater than if their houses had
been located in a neighborhood where Defendants’ scheme
. . . did not occur.” Plaintiffs further contend that the foreclo-
sures and short sales have “drastically altered” the “desirabili-
ty” of their properties and neighborhoods, resulting in
abandoned houses, multiple families living in one home, tran-
sient neighborhoods, and even increased crime.

   Plaintiffs’ claims fall into two broad categories. They
allege injuries that occurred at the time of sale: namely, that
                 MAYA v. CENTEX CORPORATION                17943
they paid more for their homes than they were actually worth
at the time, and that they would not have purchased their
homes had defendants made the proper disclosures. We will
refer to these claims as plaintiffs’ “overpayment” and “rescis-
sion” claims. Plaintiffs also allege injuries that occurred after
the sale: that their homes have decreased in economic value
and desirability as places to live. We will refer to these claims
as plaintiffs “decreased value” and “decreased desirability”


   Defendants each filed a motion to dismiss, arguing that the
plaintiffs (1) lacked constitutional and statutory standing; (2)
failed to allege their fraud-based claims with particularity as
required by Rule 9(b); (3) failed to state a claim as to each
cause of action under Rule 12(b)(6). The district court granted
all of the motions to dismiss on the grounds that plaintiffs
lack constitutional standing.

   The district court, relying on three cases presenting similar
facts, concluded that plaintiffs failed to allege a “concrete,
particular, and actual injury.” See Kaing v. Pulte Homes, Inc.,
No. 09-5057, SC 2010 WL 625365 (N.D. Cal. Feb. 18, 2010);
Tingley v. Beazer Homes Corp., No. 3:07cv176, 2008 WL
1902108 (W.D.N.C. April 25, 2008); Green v. Beazer Homes
Corp., No. 3:07-1098-CMC, 2007 WL 2688612 (D.S.C. Sept.
10, 2007)). First, it held that because none of the owners had
sold or attempted to sell their homes, any loss in the value of
homes caused by the builders’ wrongful acts and omissions
was “conjectural.” In other words, the loss in value could not
“be ascertained, nor measured [against the initial purchase
price] unless and until the owner sells the house.” Second, the
district court concluded that both the decreased value and
alleged overpayment had the capacity “to fluctuate with
changes in the economy,” thus “strongly suggesting” that the
injury was “conjectural and speculative, not actual or immi-
17944            MAYA v. CENTEX CORPORATION
   In addition, the district court held that none of the alleged
injuries were “fairly traceable” to defendants’ actions. As to
plaintiffs’ decreased value theory, the district court held that
any loss in value to plaintiffs’ homes “necessarily depend[s]”
on a causal chain including numerous independent forces,
including the decisions of “unqualified” buyers to default on
their homes and the decision of mortgage assignees to fore-
close on the defaulted mortgages. Similarly, it held that the
decreased desirability of the neighborhood (unkempt yards,
transient neighbors, etc.) was not linked to defendants’ con-
duct by “more than speculation.” Finally, with respect to the
overpayment theory, the district court stated that the injury
depended on a number of factors inflating housing prices
nationwide. Because the district court held that plaintiffs
lacked standing, it dismissed the cases for lack of subject mat-
ter jurisdiction, and declined to reach the Rule 9 and failure
to state a claim arguments. The court also denied plaintiffs’
request to amend in order to introduce expert testimony that
could cure any defect in standing, and dismissed the cases
with prejudice.


   “[T]hose who seek to invoke the jurisdiction of the federal
courts must satisfy the threshhold requirement imposed by
Article III of the Constitution by alleging an actual case or
controversy.” City of Los Angeles v. Lyons, 461 U.S. 95, 101
(1993). “[T]o satisfy Article III’s standing requirements, a
plaintiff must show (1) it has suffered an ‘injury in fact’ that
is (a) concrete and particularized and (b) actual or imminent,
not conjectural or hypothetical; (2) the injury is fairly trace-
able to the challenged action of the defendant; and (3) it is
likely, as opposed to merely speculative, that the injury will
be redressed by a favorable decision.” Friends of the Earth,
Inc., v. Laidlaw Ent’l Serv., Inc, 528 U.S. 167, 180 -81 (2000)
(quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61
(1992)). We review de novo a district court’s determination
                 MAYA v. CENTEX CORPORATION                17945
that plaintiffs lack constitutional standing. Breiner v. Nev.
Dept. of Corrections, 610 F.3d 1202, 1206 (9th Cir. 2010).


   [1] The district court erroneously concluded that lack of
Article III standing was grounds for dismissal under Federal
Rule of Civil Procedure 12(b)(6) for failure to state a claim.
Though lack of statutory standing requires dismissal for fail-
ure to state a claim, lack of Article III standing requires dis-
missal for lack of subject matter jurisdiction under Federal
Rule of Civil Procedure 12(b)(1). Simmonds v. Credit Suisse
Sec. (USA) LLC, 638 F.3d 1072, 1087 n.6 (9th Cir. 2011); see
also Vaughn v. Bay Envt’l Mgmt., Inc., 567 F.3d 1021, 1022
(9th Cir. 2009) (statutory standing); Warren v. Fox Family
Worldwide, Inc., 328 F.3d 1136, 1141 (9th Cir. 2003) (consti-
tutional standing). In light of this error, the district court
unnecessarily limited the scope of its review. While review
for failure to state a claim under 12(b)(6) is generally con-
fined to the contents of the complaint, Marder v. Lopez, 450
F.3d 445, 448 (9th Cir. 2006), in determining constitutional
standing, “it is within the trial court’s power to allow or to
require the plaintiff to supply, by amendment to the complaint
or by affidavits, further particularized allegations of fact
deemed supportive of plaintiff’s standing.” Warth v. Seldin,
422 U.S. 490, 501 (1975); see also Table Bluff Reservation
(Wiyot Tribe) v. Philip Morris, Inc., 256 F.3d 879, 882 (9th
Cir. 2001) (in assessing standing, the court may consider “the
complaint and any other particularized allegations of fact in
affidavits or amendments to the complaint”).

   Moreover, because the district court treated the motion as
a 12(b)(6), it inappropriately applied the standards of Ashcroft
v. Iqbal, 129 S. Ct. 1937 (2009) and Bell Atlantic Corp. v.
Twombly, 550 U.S. 544 (2007). Twombly and Iqbal addressed
the pleading required to survive a motion to dismiss for fail-
ure to state a claim, and, distilled to their essence, impose two
requirements. First, the reviewing court, though crediting fac-
17946               MAYA v. CENTEX CORPORATION
tual assertions made in the pleadings, is not required to credit
legal conclusions. Iqbal, 129 S. Ct. at 1949-50 (citing Twom-
bly, 550 U.S. at 555). Second, the complaint cannot survive
a motion to dismiss unless it alleges facts that plausibly (not
merely conceivably) entitle plaintiff to relief. Id. at 1950-51.
In this case, the district court stressed that the complaint “re-
quires more than labels and conclusions, and a formulaic reci-
tation of the elements of the cause of action will not do.” It
also concluded that “[p]laintiffs failed to plead facts sufficient
‘to raise a right to relief above the speculative level.’ ”

   Twombly and Iqbal are ill-suited to application in the con-
stitutional standing context because in determining whether
plaintiff states a claim under 12(b)(6), the court necessarily
assesses the merits of plaintiff’s case. But the threshold ques-
tion of whether plaintiff has standing (and the court has juris-
diction) is distinct from the merits of his claim. Rather, “[t]he
jurisdictional question of standing precedes, and does not
require, analysis of the merits.” Equity Lifestyle Props., Inc.
v. San Luis Obispo, 548 F.3d 1184, 1189 n.10 (9th Cir. 2008);
see also Seldin, 422 U.S. at 500 (Standing “in no way depends
on the merits of the [ ] contention that particular conduct is
illegal.”); Bell v. Hood, 327 U.S. 678, 682 (1946); Catholic
League for Religious and Civil Rights v. San Francisco, 624
F.3d 1043, 1049 (9th Cir. 2010) (en banc) (“Nor can standing
analysis, which prevents a claim from being adjudicated for
lack of jurisdiction, be used to disguise merits analysis, which
determines whether a claim is one for which relief can be
granted if factually true.”). This is not to say that plaintiff may
rely on a bare legal conclusion to assert injury-in-fact,3 or
engage in an “ingenious academic exercise in the conceiv-
able” to explain how defendants’ actions caused his injury.4
     See Chapman v. Pier 1 Imports (U.S.) Inc., 631 F.3d 939, 954-55 &
n.9 (2011) (en banc) (holding that a plaintiff who did not allege which bar-
riers existed at a store and how they impacted his disability could not
establish injury-in-fact simply by claiming that the store deprived him of
“full and fair enjoyment” in violation of the ADA).
     United States v. Students Challenging Regulatory Agency Procedures
(SCRAP), 412 U.S. 669, 689-90 (1973).
                 MAYA v. CENTEX CORPORATION                17947
We simply note that Twombly and Iqbal deal with a funda-
mentally different issue, and that the court’s focus should be
on the jurisprudence that deals with constitutional standing.


   Each element of standing “must be supported . . . with the
manner and degree of evidence required at the successive
stage of the litigation.” Defenders of Wildlife, 504 U.S. at 561.
“For purposes of ruling on a motion to dismiss for want of
standing, both the trial and reviewing courts must accept as
true all material allegations of the complaint and must con-
strue the complaint in favor of the complaining party.” Seldin,
422 U.S. at 501. “At the pleading stage, general factual alle-
gations of injury resulting from the defendant’s conduct may
suffice, for on a motion to dismiss we ‘presum[e] that general
allegations embrace those specific facts that are necessary to
support the claim.” Defenders of Wildlife, 504 U.S. at 561
(alteration in original) (quoting Lujan v. Nat’l Wildlife Fed’n,
497 U.S. 871, 889 (1990)); see also Lucas v. S.C. Coastal
Council, 505 U.S. 1003, 1014 n.3 (1992) (cautioning that
while at the summary judgment stage, the court “require[s]
specific facts to be adduced by sworn testimony,” “a chal-
lenge to a generalized allegation of injury in fact made at the
pleading state . . . would have been unsuccessful”). “ ‘[A]
plaintiff must demonstrate standing for each claim he seeks to
press’ and ‘for each form of relief that is sought.’ ” Davis v.
Fed. Elec. Comn’n, 554 U.S. 724, 734 (2008) (quoting Daim-
ler Chrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006)).

   The parties concede, and we agree, that a favorable court
decision would redress plaintiffs’ injuries. Accordingly we
address only the first two elements of constitutional standing.
We conclude that plaintiffs have established injury-in-fact and
causation with respect to their overpayment and rescission
claims. We hold that decreased value and desirability are con-
crete injuries-in-fact, but agree with the district court that the
current record does not establish a sufficient causal connec-
17948               MAYA v. CENTEX CORPORATION
tion between defendants’ actions and plaintiffs harms. Never-
theless, we hold that plaintiffs should be permitted to amend
their complaint because plaintiffs may be able to establish by
amendment that they have standing to pursue their claims.

1.       Overpayment and Rescission

   [2] a. Injury-In-Fact. To qualify as an injury-in-fact, an
alleged harm must be “concrete and particularized” and “ac-
tual or imminent, not conjectural or hypothetical.” Laidlaw,
528 U.S. at 180-81. Plaintiffs claim that, as a result of defen-
dants’ actions, they paid more for their homes than the homes
were worth at the time of sale. Relatedly, they claim that they
would not have purchased their homes had defendants made
the disclosures allegedly required by law. We agree with
plaintiffs that these are actual and concrete economic injuries.
See, e.g., Valley Forge Christian Coll. v. Ams. United for Sep-
aration of Church and State, 454 U.S. 464, 486 (1982); Sierra
Club v. Morton, 405 U.S. 727, 733-34 (1972) (“[P]alpable
economic injuries have long been recognized as sufficient to
lay the basis for standing”); San Diego Cnty. Gun Rights
Comm. v. Reno, 98 F.3d 1121, 1130 (9th Cir. 1996)
(“Economic injury is clearly a sufficient basis for standing.”).
Allegedly, plaintiffs spent money that, absent defendants’
actions, they would not have spent. Cf. Gen. Motors Corp. v.
Tracy, 519 U.S. 278, 286 (1997) (holding that consumers who
paid more for gas than they should have as a result of discrim-
inatory tax laws had Article III standing). This is a quintes-
sential injury-in-fact.

   [3] The district court concluded that the possibility of
improvement in the housing market made plaintiffs’ injuries
speculative, because it is possible that they could sell their
homes for a profit at some point in the future. The district
court misapprehended plaintiffs’ allegations. Plaintiffs claim
that they paid more for their homes than they were worth at
the time of sale.5 Future recovery in the housing market will
   We reject defendants’ argument that, under Dura Pharmaceuticals,
Inc. v. Broudo, 544 U.S. 336 (2005), plaintiffs could not have paid more
                    MAYA v. CENTEX CORPORATION                      17949
not cure plaintiffs’ injuries—if plaintiffs had paid what the
homes were worth at the time of sale, they would obtain
greater returns if they sold during a time of economic
improvement. Further, if plaintiffs would not have purchased
their homes absent defendants’ misconduct, the injury was
created at the moment of fraudulent purchase, and is not
affected by any changes in the housing market.

   [4] b. Causation. Defendants would have us require
plaintiffs to demonstrate that defendants’ actions are the
“proximate cause” of plaintiffs’ injuries. Plaintiffs do not bear
so heavy a burden. To survive a motion to dismiss for lack of
constitutional standing,6 plaintiffs must establish a “line of
causation” between defendants’ action and their alleged harm
that is more than “attenuated.” Allen v. Wright, 468 U.S. 737,
757 (1984). A causal chain does not fail simply because it has
several “links,” provided those links are “not hypothetical or
tenuous” and remain “plausibil[e].” Nat’l Audubon Soc., Inc.
v. Davis, 307 F.3d 835, 849 (9th Cir. 2002) (citing with
approval Autolog Corp. v. Regan, 731 F.2d 25, 31 (D.C. Cir.
1984) (What matters is not the “length of the chain of causa-
tion,” but rather the “plausibility of the links that comprise the
chain.”)). In cases where a chain of causation “involves
numerous third parties” whose “independent decisions” col-
lectively have a “significant effect” on plaintiffs’ injuries, the

than their homes were worth because they paid the price supported by the
market at the time. Dura is inapplicable to this case because it discussed
the standards for proving the loss and causation elements of a private
securities action under 15 U.S.C. § 78u-4, not standing under Article III.
The elements of a statutory cause of action are irrelevant to the constitu-
tional standing analysis.
     Defendants’ reliance on Duke Power Co. v. Carolina Envt’l Study
Group Inc., 438 U.S. 59, 75 n.20 (1978) and Simon v. E. Ky. Welfare
Rights Org., 426 U.S. 26 (1976) is misplaced. Duke Power involved a
final judgment on the merits. 438 U.S. at 67-68. Simon was an appeal from
the grant of summary judgment. 426 U.S. at 41-42. Neither case estab-
lishes the burden for surviving a motion to dismiss.
17950            MAYA v. CENTEX CORPORATION
Supreme Court and this court have found the causal chain too
weak to support standing at the pleading stage. See Allen, 468
U.S. at 759; San Diego Gun Rights, 98 F.3d at 1126.

   [5] The district court concluded that the “housing bubble,
or inflation of housing prices, was a nationwide phenomenon,
traceable to variables independent of Defendants’ alleged
scheme, such as lax regulatory enforcement, rates of unem-
ployment, credit market developments, and general economic
growth.” Accordingly, it held that plaintiffs had not estab-
lished a sufficient causal connection between defendants’
actions and the allegedly inflated prices paid by plaintiffs. We
disagree. Construing the facts in the light most favorable to
plaintiffs and drawing all inferences in their favor, plaintiffs
have sufficiently alleged that defendants, not third parties,
inflated the “bubble” in their particular neighborhoods, caus-
ing plaintiffs to overpay. Plaintiffs claim that defendants
financed a substantial majority of buyers in plaintiffs’ neigh-
borhoods, and were thus able to dictate the terms of a large
number loans and plausibly create demand that would not oth-
erwise have existed. Further, the neighborhoods were new
developments, so there was no independent economic base-
line against which to assess the neighborhoods’ value. Under
these circumstances, plaintiffs can plausibly claim that the
“artificial demand” created by defendants’ marketing and
financing practices had an identifiable effect on the price they
paid for their homes.

   [6] The causal connection between defendants’ actions and
plaintiffs’ rescission claim is even stronger. Plaintiffs state
that they would not have purchased their homes had there
been proper disclosure of defendants’ lending practices. There
is a direct causal link between defendants’ allegedly faulty
disclosure and plaintiffs’ injuries. In sum, we hold that plain-
tiffs have established both injury and causation sufficient to
withstand a motion to dismiss on their claims that (1) they
paid more for their homes than they were worth, and (2) they
                 MAYA v. CENTEX CORPORATION                17951
would not have purchased their homes had defendants fully
disclosed their practices.

2.   Decreased Value and Desirability

   [7] a. Injury-in-Fact. A current reduction in the eco-
nomic value of one’s home is a cognizable injury for constitu-
tional standing purposes. In Gladstone Realtors v. Bellwood,
441 U.S. 91, 101-11 (1979), plaintiffs sued real estate brokers
for “steering” white prospective home-buyers away from their
neighborhood, allegedly in violation of Title VII and the Fair
Housing Act. Plaintiffs alleged, among other injuries, that the
brokers “manipulated the housing market of Bellwood to the
economic and social detriment of the citizens of [the] village.”
Id. at 115, n.30. The Court held plaintiffs had alleged a cogni-
zable economic injury sufficient to survive summary judg-
ment. It stated that plaintiffs would have to prove at trial
“absolute or relative diminution in value of the individual
[residents’] homes” but noted that “convincing evidence that
the economic value of one’s home has declined as a result of
the conduct of another certainly is sufficient under Art. III to
allow standing to contest the legality of that conduct.” Id. at
115; see also Laidlaw, 528 U.S. at 183-84 (2000) (determin-
ing that a plaintiff’s declaration that “her home, which is near
[defendant’s] facility, had a lower value than similar homes
located farther from the facility, and that she believed the pol-
lutant discharges accounted for some of the discrepancy”
properly supported the plaintiff’s claim that the challenged
action “directly affected [her] . . . economic interests.”). Simi-
larly, in Barnum Timber v. U.S. Environmental Protection
Agency, we held that a landowner alleging that it would suffer
a reduction in the economic value of its property on account
of the EPA’s impending classification of a neighboring creek
as an impaired water body had established an injury in fact
sufficient to withstand a motion to dismiss. 633 F.3d 894, 898
(9th Cir. 2011); see also Allandale Neighborhood Ass’n v.
Austin Transp. Study Policy Advisory Comm., 840 F.2d 258,
262 (5th Cir. 1988) (“[A] market devaluation has present
17952            MAYA v. CENTEX CORPORATION
adverse consequences short of realization through sale.”).
These cases establish that a present decrease in the economic
value of one’s home is a cognizable and concrete injury-in-

   [8] The district court’s holding to the contrary rests primar-
ily on its conclusion that plaintiffs will not realize any
decrease in the value of their property until they attempt to
sell (and that the economy may improve in the interim, pre-
venting any loss), so the injury is speculative. The district
court’s position cannot be reconciled with Gladstone,
Laidlaw, and Barnum Timber—nothing in those decisions
suggests that plaintiffs had attempted or would attempt to sell,
or that selling one’s property is a necessary pre-requisite to
claiming injury on account of its decreased value. More fun-
damentally, the district court’s reasoning misses the thrust of
plaintiffs’ claims. Plaintiffs argue that defendants’ acts caused
their homes to lose value above and beyond those losses
caused by general economic conditions. Thus, disregarding
the vicissitudes of the national housing market, the portion of
the diminution in the value of plaintiffs’ property attributable
to defendants’ acts remains. To be sure, plaintiffs would need
to quantify the damages resulting from decreased value in
order to recover, but that isn’t necessary to establish injury at
the pleading stage. Gladstone, 441 U.S. at 115.

   [9] Relatedly, plaintiffs claim they were injured because
the blight resulting from defendants’ lending practices makes
their homes less desirable places to live. Decreased quality of
life is an injury in fact sufficient to support standing. For
example, in City of Sausalito v. O’Neil, 386 F.3d 1186,
1198-99 (9th Cir. 2004), we held that a city had constitutional
standing to pursue its claim that defendants’ acts would result
in increased traffic, crowds, decreased attractiveness, and
damage to the town’s historical character. See also Walker v.
City of Mesquite, 169 F.3d 973, 980 (5th Cir. 1999) (holding
that property owners alleged injury by claiming that newly
constructed housing projects would increase traffic, noise, and
                    MAYA v. CENTEX CORPORATION                       17953
crime); Kelley v. Selin, 42 F.3d 1501, 1509 (6th Cir. 1995)
(holding that landowners had alleged sufficient injury to aes-
thetic interests caused by storage of nuclear waste nearby);
Alschuler v. Dep’t of Hous. & Urban Dev., 686 F.2d 472,
476-77 (7th Cir. 1982) (holding that plaintiffs who alleged
that occupancy of a nearby housing project would increase
crime, strain community resources, and decrease the aesthetic
quality of the neighborhood had alleged an injury in fact suffi-
cient to withstand a motion to dismiss).7 Both reduction in
value to one’s property (even if one has not attempted to sell
the property) and decreased quality of life are concrete inju-

   b. Causation: To support their claim that defendants’
actions resulted in decreased home values, plaintiffs allege
that sales of homes subject to foreclosure are “usually well
below market value,” and those sales “then become the new
comparative sales values for the neighborhood . . . [at] a
vastly lower market rate.” Thus, on plaintiffs’ theory, the
decreased-value injury does not occur until the risk posed by
defendants’ lending and disclosure practices comes to fruition
in foreclosure. The same is true of plaintiffs’ decreased desir-
ability claim. They contend that foreclosures (not merely the
risk of foreclosure) resulted in abandoned homes and other
forms of blight.

  [10] We agree with the district court that plaintiffs have
not established how defendants’ actions necessarily result in
    Defendants attempt to distinguish these cases by arguing that each case
involved a physical intrusion onto plaintiffs’ property. This distinction is
immaterial for the purposes of determining whether plaintiffs have been
injured — the decrease in value and desirability exists whether caused by
a “physical” or “non-physical” intrusion. The thrust of defendants’ argu-
ment is that they should not be liable for failing to disclose non-physical
factors affecting plaintiffs’ property values. This argument concerns the
merits of plaintiffs’ claims, not whether they have standing to pursue
17954                MAYA v. CENTEX CORPORATION
foreclosure,8 nor do plaintiffs’ complaints allege that the
decreased value is caused by the risk posed by their neighbors
(even absent foreclosures).9 Nevertheless, we conclude that, in
the circumstances presented, plaintiffs should be permitted to
amend their complaint. “Dismissal without leave to amend is
improper unless it is clear, upon de novo review, that the
complaint could not be saved by any amendment.” Krainski
v. Nev. ex rel. Bd. of Regents of Nev. System of Higher Educ.,
616 F.3d 963, 972 (9th Cir. 2010).

  Before the district court, plaintiffs offered to amend and
produce an expert report distinguishing the effect of defen-
dants’ actions from general economic influences. Expert testi-
mony can be used to explain the causal connection between
defendants’ actions and plaintiffs’ injuries, even in the context
of other market forces. Barnum Timber, 633 F.3d at 900-01.
Accordingly, we cannot say that it is clear that the complaint
could not be saved by any amendment. The district court
should have permitted plaintiffs to amend and include any
expert testimony that could have established a sufficient
causal connection between defendants’ actions and the
decreased value and desirability of their homes.


   We hold that the district court erred in dismissing plain-
     See Bennett v. Spear, 520 U.S. 154, 168-69 (1997) (“[I]t does not suf-
fice if the injury complained of is the result of the independent action of
some third party not before the court, [but] that does not exclude injury
produced by determinative or coercive effect upon the action of someone
else.”) (emphasis added).
     Cf. Krottner v. Starbucks Corp., 628 F.3d 1139, 1142 (9th Cir.
2010)(“A plaintiff may allege a future injury in order to comply with [the
injury-in-fact] requirement, but only if he or she ‘is immediately in danger
of sustaining some direct injury as the result of the challenged . . . conduct
and the injury or threat of injury is both real and immediate, not conjec-
tural or hypothetical.’) (quoting City of Los Angeles, 461 U.S. at 102
(1983)) (emphasis in original).
                    MAYA v. CENTEX CORPORATION                      17955
tiffs’ overpayment and rescission claims for lack of Article III
standing. We also hold that plaintiffs’ decreased economic
value and desirability are cognizable injuries. While we agree
with the district court that, on the current record, plaintiffs
have not established a sufficient causal connection between
any decreased value and desirability and defendants’ actions,
plaintiffs should be permitted to amend their complaint and
attach expert testimony on causation. Accordingly, we reverse
and remand for further proceedings.10

     In light of this disposition, we do not reach the issue of whether the
district court should have granted defendants’ motions to dismiss for fail-
ure to state a claim or failure to plead fraud with particularity.

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